Medicare pay formula may finally get fixed

Efforts to finally get rid of that dreaded Medicare payment formula could see smoother sailing now that the Congressional Budget Office has sliced the price tag nearly in half.

That could give momentum to legislation like the bipartisan repeal bill Reps. Allyson Schwartz (D-Pa.) and Joe Heck (R-Nev.) unveiled Wednesday morning — a reincarnated version of their bill doing away with the Sustainable Growth Rate formula.

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“I think the new CBO number bodes well for passing the legislation — it’s a much smaller hill to overcome,” Heck said.

The CBO downgraded the cost of repealing the flawed formula from $243.7 billion to $138.3 billion. That significantly lightened the load for lawmakers who agree that they’ve got to scrap the formula but have been gridlocked for years over how to pay for it. Without a permanent solution, they frantically search for a last-minute, short-term “doc fix” year after year.

Schwartz and Heck had introduced a virtually identical repeal plan last year — except that it would have paid for repealing the formula with unused funds from the wars being wound down in Iraq and Afghanistan. That was controversial among Republicans and some Democrats, so they stripped it out this time, leaving it up to lawmakers to find a pay-for.

Even though that job is now a lot easier, it’s unclear how far this particular piece of legislation will actually get. Other SGR repeal bills are in the mix.

Republicans on the House Ways and Means Committee have been circulating their own memo on SGR repeal, and while it contains many similar ideas, they could choose to act on their own bill instead. Health Subcommittee Chairman Kevin Brady (R-Texas) has said he’ll introduce legislation later this year.

But Schwartz and Heck said a few developments over the past two days have boosted their hopes. In addition to the new CBO numbers, House Majority Leader Eric Cantor Tuesday listed Medicare reform as a top goal for House Republicans this session.

Virtually everyone agrees the SGR formula must be fixed once and for all so that Medicare providers no longer face uncertainty about precipitous drops in reimbursement year after year. Congress narrowly averted a scheduled 27 percent cut that was to have taken effect on Jan. 1, but there’s another 25 percent cut looming next year.